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Press release Together more innovative

Together more innovative
Through collaborative innovations, Mittelstand companies (SMEs) are addressing ecological and digital transformation.

Own resource constraints and the desire to gain an early knowledge advantage over competitors are primary motives why Mittelstand enterprises, with regard to the circular economy, initiate - and implement - innovative projects together with startups, research institutions, or other businesses.

According to research by the IfM Bonn, established Mittelstand businesses in the manufacturing sector are particularly active in this regard. These companies
typically lack their own research and development departments as well as sufficient financial resources to consistently generate and implement innovations. Furthermore, compared to large corporations and startups, Mittelstand enterprises struggle more to attract skilled professionals with innovative knowledge. At the same time, these Mittelstand businesses face the challenge of rapidly rebalancing their business models, for instance by leveraging collected data for new service offerings or optimizing business processes. On behalf of the Bertelsmann Stiftung, a research team from the IfM Bonn has investigated the motives and challenges related to collaborative innovations in general, and especially those of the circular economy.

Different partners for different goals

To compensate for their lacking capabilities, some Mittelstand enterprises intensify their innovative collaboration with customers and suppliers. Other Mittelstand enterprises, however, actively seek partnerships with innovative startups or research institutions. "Mittelstand enterprises seek collaborations with startups when they aim to explore new technologies and markets.

On the other hand, research institutions are typically chosen as partners when companies want to implement particularly risky and capital-intensive innovations. This allows established Mittelstand enterprises to reduce their investment and innovation risks," reports Dr. Jonas Löher from the IfM.

Creation of new business models

"Overall, it is evident that Mittelstand enterprises have recognized the necessity to actively pursue the transition towards a decarbonized and circular economy. Accordingly, they must seize market potential and the opportunity for technological leadership in sustainable future sectors for themselves. This can only succeed if companies are actively engaged in innovation and embedded in strong innovation ecosystems," concludes Armando García Schmidt, Senior Expert at the Bertelsmann Stiftung. According to the study by Bertelsmann Stiftung and IfM Bonn, to further encourage more Mittelstand enterprises to engage in collaborative innovations, it would be beneficial for associations and chambers to develop more (inter)regional digital platforms. These platforms could allow companies and research institutions to present themselves with brief profiles outlining their respective offerings and needs.